‘Desperate times’: Northampton brewery responds to 62 percent increase in beer production prices

A Northampton brewery has responded to the 62 percent increase in the cost of beer production.

Alaric Neville, managing director of Phipps NBC brewery, says the industry is experiencing “desperate times”.

This follows eToro’s Beer Index revealing the production, packaging and transportation of beer has soared by just under two-thirds of the total costs since August 2020.

The Beer Index looked at the spot prices of raw materials required by beer producers, such as barley and malt, and the aluminium and gasoline needed for packaging and transportation.

Alaric says as a medium-sized company, the increasing price of gas is having the biggest impact on Phipps NBC – as well as the cost of diesel as they deliver beer to venues across the East Midlands.

The managing director said: “I question when the time will come when people will stop buying beer, as it is not an essential in many peoples’ lives – but equally it would be one of the last things some people would give up.

“We’re doing well as a company and felt we had bounced back from the pandemic, and it is frustrating to now be facing this challenge.

“I’ve been in the company since 2008 and I’ve not seen anything like these price increases before.”

Phipps NBC has tried its best to keep staff wages in line with the rate of inflation, and they were last increased by five percent in April.

“We’re not prepared to allow our staff to take the hit for the increase in costs,” said Alaric.

Phipps NBC has had to subsidise the impact of raising wages, as customers will stop buying the products if the prices are increased too much.

Fluctuation in stock prices also causes issues for the company. Where prices used to be held for a year, which was then decreased to six months, they are now only held for three months – as it depends on what the suppliers and energy companies want to charge.

What the new Prime Minister Liz Truss does next will be crucial for the beer industry, and Alaric believes the fate of its future lies in her hands – as well as what happens in Ukraine.

He believes the Government’s priority is the consumer, and businesses, particular small independents, tend to be left behind.

Alaric questioned: “Does the Government no longer want this industry to be part of British society?

“If this continues, the independent businesses will be first to close, and the market will continue to break down.”

This also comes as a result of high levels of tax being added to beer and alcohol, with roughly one-third of the cost of a pint being tax.

Alaric has seen businesses, which have survived everything else, shut down as a result of the problems current price increases have caused.

He says “it is sad to see decent local bars and pubs shut down, no matter if they stock Phipps or not” and they “mourn as each loss has an impact on the industry”.